BUSINESS

Huge taxation for scant returns

PROKOPIS HATZINIKOLAOU

TAGS: Taxation, Economy

Families in Greece with an average monthly salary of 900 euros pay particularly high taxes in return for an almost nonexistent benefits policy and a poor education system, according to the Organization for Economic Cooperation and Development (OECD). Meanwhile the country has the third highest tax rate in the European Union for medium and high incomes, which in the last few years have faced an ever increasing tax bill, Eurostat data show.

By contrast, the majority of OECD and eurozone countries have been constantly reducing their tax rates, both for individuals and corporations, while improving social benefits.

A closer look at the data presented on Tuesday by the OECD in its “Going for Growth” report and Eurostat indicates that Greece resembles a Scandinavian country in terms of taxation while remaining firmly in the Balkans as far as benefits and education are concerned.

Last year Greece had the fourth highest tax rate for individuals across the EU. Combined with the solidarity levy, income tax amounted to 55 percent, behind that in Sweden (57.1 percent), Portugal (56.2 percent) and Denmark (55.8 percent). On the other hand Bulgaria has maintained its rate unchanged at just 10 percent since 2008.

Greece runs counter to the rest of Europe, hiking its top rates from 40 percent in 2008 to 55 percent today, as income tax last year came to 45 percent for earnings over 200,000 euros per year plus 10 percent for the solidarity levy.

Taxation on families with children is particularly high in Greece: OECD data provide the example of a couple with two children and an average salary of 850-900 euros per month who pay 38.2 percent of it to the taxman, against an OECD average of 30 percent. In Ireland it comes to 13.6 percent.

It’s even worse for the jobless, who get a benefit of just 40 percent of the average income, against 72.8 percent in Italy and the Czech Republic. The OECD also stresses the very low quality of the Greek education system based on its PISA ranking, compared to fellow member-states.

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